SMC putting up packaging plant in Davao for $700 M

MANILA, Philippines -  Diversified conglomerate San Miguel Corp. (SMC) is bulking up its packaging business with an initial investment of $700 million for a new integrated plant in Davao.

SMC president and chief operating officer Ramon Ang said the company would start building in the next two months a new packaging plant in its 2,000-hectare industrial estate in Davao.

 “This year we will break ground and build a big plastic plant to produce pallets and crates as well as a larger carton converting plant,” Ang said yesterday in an interview following liquor unit Ginebra San Miguel’s annual stockholders meeting.

Ang said the facility would be the biggest glass plant in the country with a capacity of 800 tons a day.

He said the industrial estate in Davao is a perfect site for the new facility as electricity prices are very competitive and cost of raw materials are cheap.

The plant’s output will be exported in countries such as the US, Australia, New Zealand and Europe.

“This first blow of San Miguel packaging in Davao will initially cost $700 million and there will be additional. There are a lot of heavy industries who want to locate there,” Ang said.

“From the time we ground break in the next two months, it should be done in the next 24 months. Two years to complete,” he added.

SMC packaging arm San Miguel Yamamura Packaging Group’s revenues amounted to P6.8 billion in the first quarter, five percent higher year-on-year on account of higher sales from its metals and plastics businesses and double-digit growth from its Australian operations.

Operating income likewise rose six percent to P632 million.

SMC in February acquired 100 percent of Portavin Holdings Pty. Ltd. (Portavin), Australia’s leading wine services supplier.

Portavin, whose business are in four key regions in Australia, bottles more than 80 million bottles per year for over 800 wineries. It is also in trading and distribution of packaging products.